Become Govt. Certified GST Practitioner in just 58 hrs. Register Now!

Psc contract

pankaj (teacher) (74 Points)

07 December 2011

can anyone help me on how to audit profit sharing contract of oil and natural gas co.?

Reply
Follow
Share

7 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 07 December 2011

Originally posted by : pankaj
	can anyone help me on how to audit profit sharing contract of oil and natural gas co.?

PSC = Production Sharing Contract ???

Upgrade to CAclubindia Pro. Subscribe Now!

pankaj (teacher) (74 Points)
Replied 08 December 2011

yes deepak its production sharing contract ..if u cud help me with what are the points we need to verify in particular..during the audit..reply soon

Deepak Gupta (CA Student) (15922 Points)
Replied 08 December 2011

The internal auditor would need to check whether the PSC Reports are submitted as per the provisions and timelines of the PSC. The following statements are usually submitted either on a monthly or a quarterly basis:

> Production Statement

> Value of Production and Pricing Statement

> Statement of costs, expenditures and receipts

> Cost recovery statements

> Profit sharing statement

> End of year statement

> Budget statement

The following should also be verified by the internal auditor:

> The base figures supporting the statements

> Adherence to the timelines

> Review and authorisation of the statements

> Any clarification sought by DGH (Director General of Hydrocarbons) on the statements

(For more insight, refer the below attached file:

Technical Guide on Internal Audit in Upstream Oil and Gas Companies

The Institute of Chartered Accountants of India)

Attached File : 555789 882179 upstreamoilgas.pdf downloaded: 256 times

1 Like

(Guest)

Thanks a lot Deepak .....

pankaj (teacher) (74 Points)
Replied 09 December 2011

can u help me with sumthing on dgh audit of psc??

Upgrade to CAclubindia Pro. Subscribe Now!

pankaj (teacher) (74 Points)
Replied 09 December 2011

can u help me with sumthing on dgh audit of psc??

Deepak Gupta (CA Student) (15922 Points)
Replied 09 December 2011

Originally posted by : pankaj
	can u help me with sumthing on dgh audit of psc??

With regard to PSC matters, the role of DGH is to monitor the activities on behalf of Government and ensure compliance by the Contractor the terms of PSC provisions within the given framework of PSC. DGH advises Ministry of Petroleum on technical matters to perform the role of regulator.

DGH is required to perform its functions within the given framework as per terms of Production Sharing Contracts (PSCs), Government policies, guidelines, instructions, Rules and regulations. For all the proposals beyond the above provisions, functions of DGH are limited to evaluating the proposals from technical parameters.

DGH Role is a technical validation role and is distinct from that of auditors. DGH functioning needs to be supported by regular two-tier audit for monitoring the financial issues associated with PSC. Auditors need to verify the adherence of "procurement procedures" and "accounting procedures" by the contractors and this role is outside the purview of DGH. First audit is carried out by the auditors appointed by Management committee (MC). Second audit is carried out by Government appointed auditors. Auditors are supposed to carry out exhaustive exercise to ensure compliance by the Contractors with regard to accounting and procurement procedures and other aspects.

2 Like